Confusion over financial protection

The collapse of Zoom Airlines has highlighted the confusion experienced by consumers over whether they will be financially protection in the event of an airline or holiday company collapsing.

A recent Thomson Holidays survey found that over 90 per cent of holidaymakers said that having their holiday financially protected was important to them.

However, the poll of 1,000 TUI Travel UK customers also found that over half of holidaymakers wrongly believing that booking a scheduled flight directly with an airline means they will be financially protected in the event of bankruptcy.

Currently financial protection is only available to customers who travel on a package holiday with a company bonded with the Civil Aviation Authority's Air Traffic Organisers' Licensing scheme (ATOL).

People who book a scheduled flight direct with an airline are not given the same protection.

Despite a government commitment to encourage scheduled airlines to communicate this, over 50 per cent of passengers wrongly believed that having paid upfront for their flights in good faith, their money will be protected if the airline goes bankrupt.

Thomson commercial director David Burling called for the government to put "in place a proper system of financial protection for its citizens".

"The EU wants all consumers to be protected whilst on holiday; however only approximately a third of UK holiday makers travel on a package which is financially protected, which means continued lack of government action leaves the remaining two thirds at risk."